Be Tech Savvy In Finance Business

It is highly impossible to have a good control on any part of finance business without being a tech savvy company.

There are enough gadgets including mobiles and high speed connectivity to have every information and capture any activity very accurately on site and off site.

Top guy need not be a computer wizard or software engineer to run a finance company; he still necessarily needs to be an economist, marketer and financial wizard.

He must be open to the change and he may have to be interested to know what computers and new gadgets can do to mitigate risk and help him have a full operational control.

Whatever computer is capable, must be done through only computers. This drastically saves cost and helps control the business better. Of course, he must choose right software vendor, to really get better return on huge financial outlay upfront.

There was a company who had invested a huge money in collection module of a financial software – Finness. It was not implemented till the author joined the company as collection head.


With implementation, the following were achieved quickly:

• Centralized control on delinquency; accurate delinquency ratio and rates
• Automated work flow; segmentation was done through queing system
• Tele-calling could be started for Low risk - Low deliquent accounts
• Dunning; collection letters were sent out on time, through collection system
• Customer disputes are known
• Mitigated the risk of cash handling and misapplication
• Daily allocation and assignment of cases to field collectors
• Access to collection system, through inter and intra net
• Accounts of customers at the press of the button; foreclosure data available
• Efficiency and effectiveness could be measured, thanks to analytics.
• Customer Contact / interaction details and feedback were recorded.
• Promises To Pay were to made to pop up on PTP dates, for close follow up.

The company had moved to a position of having the lowest delinquency ratio of 6% on their car portfolio from around 12% ( In fact, the company had no accurate delinquency ratio as it depended on field delinquency data till implemenation of dedicated collection sysytem ) and more importantly, it was useful to maintain accurate customer accounts.

I am sure more advanced versions of many software are available currently to track default accounts from delinquency to collection to losses to legal proceedings to recovery.

Have one, because charge-offs need to be minimised.

Tips To Make Your Contact Successful

PREPARE:

Review the paperwork, number of days past due and contact history on the debtor before making the call. Know the history of the account, credit record, and the promises kept/broken. Have all records in front of you, ready for reference.

ATTITUDE:

Adopt a straight, professional business-like attitude. You have a contract, money is owed, payment is overdue and you have a right to expect payment. Never let it become personal. Don't yell or raise your voice; and never swear. Don't threaten; legal action is your recourse.

CONTACT:

Make sure you're talking to the right person. Don't let the individual brush you off with "You'll have to talk to the accountant" Identify the person who will pay the installments. If you can't get through after several calls, tell the secretary that you know your calls are being screened. Indicate the purpose of your call and if necessary give timelines.

CONTROL:

Control the conversation. Keep it focused on the debt and on the repayment schedule. Don't let the customer sidetrack you with personal history, excuses, etc. Remember, the object of your call is to collect money, or get a commitment, not to become friendly with the customer or win arguments.

FLEXIBLE:

Be ready to adjust to the situation. Think about the kind of customer you're dealing with and adapt to meet the circumstances. Be prepared to accept a reasonable payment schedule, and a willingness to deal with a customer's circumstances.

NOTES/ CONTACT/ INTERACTIVE HISTORY:

Keep detailed, accurate notes of every contact with the customer. Probe for further information on the customer through field executives. Notes of these contacts will help you in subsequent phone calls, and may be invaluable in litigation. Good notes will also help in further credit decisions, or in cases where skip tracing may be needed.

PRODUCTIVE:

Keep contact brief and to the point. This is a business call, not a social one. View your efforts on a ratio of time expended to results achieved. Long conversations probably mean the customer is stalling you, or trapping you in the buddy syndrome.

PRECISE:

Never leave a contact open ended, such as "I will call you soon," or "I'll send what I can." Every contact should result in a commitment to payment or Promise-To-Pay (PTP), of a specific amount, by a specific date and the mode.

 TIME:

The longer an account is held, the less likely it is that it will be recovered. If payment or a payout is not arranged within 90 days, place the claim with a repossessing agency and/or start legal proceedings.

PLACEMENT:

Use only an agency that has an experience and practices Fair practices advised by RBI. This will insure that you're dealing with ethical professionals who are fully bonded to guarantee your remittance.